Jaime buys home insurance, but never ends up making a claim. What can be said about Jaime's decision to buy home insurance?
A)It is considered by economists to be irrational behavior.
B)Buying the insurance was a bad decision.
C)Buying the insurance was not necessarily a bad decision.
D)It is a poor use of money.

Question

Quizplus · Accepted Answer

Insurance is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. Jaime's decision to buy home insurance is not necessarily a bad decision, even if he never makes a claim, because it provided peace of mind and financial protection against potential catastrophic losses.

Jaime Buys Home Insurance, but Never Ends Up Making a Claim